Michael Boskin: Obama and 'The Wealth of Nations'

After listening to his litany of economic excuses, it's clear the president's reading list should include Adam Smith.

By

Michael J. Boskin

July 1, 2012 6:13 p.m. ET

President Obama should put Adam Smith's "The Wealth of Nations" at the top of his summer reading list. This was clear after listening to his 54-minute list of economic excuses and policy proposals delivered earlier this month on the campus of Cuyahoga Community College in Cleveland.

At times Mr. Obama suggested that the profit motive is somehow ignoble, an opinion shared by many on the far left. But every student learns in introductory economics class that the pursuit of profits is essential to a successful economy, allocating resources to the use consumers value most.

This is not exactly a new insight. Writing in 1776, Adam Smith noted, "It is not from the benevolence of the butcher, the brewer, or the baker that we can expect our dinner, but from their regard to their own interest."

The president spent nearly an hour demonizing his Republican opponent Mitt Romney's economic policies and doubling down on his own failed agenda. He called for higher taxes on our most productive citizens and successful small businesses, more government spending and debt, and Washington micromanagement of wide swaths of the economy.

Instead of doubling down, Mr. Obama could have seen his party's 2010 midterm defeat as a message from voters to move to the center, announcing that his vast expansion of government was temporary and necessitated by the financial crisis and deep recession.

That's similar to what President Clinton did after his 1994 midterm rebuke that swept Republicans to control of Congress and led to bipartisan agreement to balance the budget and reform welfare. Mr. Clinton won re-election handily.

ENLARGE

Portrait of Adam Smith by John Kay, 1790.
Bettmann/CORBIS

Here are four things the president could have proposed (but didn't) to remove headwinds to growth and instill confidence in the economy:

1) Avoid the 2013 "fiscal cliff," which the Congressional Budget Office says would put us back in recession, by extending all the Bush tax cuts for one year (leaving him free to pursue his tax hikes on the "rich" later).

2) Approve the Keystone pipeline and speed up oil and gas drilling approvals, with appropriate environmental safeguards, back to the levels they were before the 2010 moratorium following the BP oil disaster.

3) Enact long-run entitlement and tax reform with lower rates and a broader base, using the proposals of the Simpson-Bowles Commission—which the president appointed, but has so far ignored—as a starting point for negotiations.

By taking these four steps, the president would have given the recovery a greatly needed boost and encouraged more businesses to invest and hire. He may well look back on this missed opportunity to move toward the middle as the mistake that ultimately cost him re-election.

Mr. Obama constantly reminds us, with justification, that he inherited a recession. But the recession ended over three years ago, while the recovery has been distressingly anemic. He also blames an "obstructionist" Congress. But Democrats had a filibuster-proof majority in the Senate and control of the House his first two years. Republicans couldn't obstruct anything. He's even blamed the Japanese tsunami and the European debt crisis.

Is it any wonder that recent polls show the majority of Americans disapprove of the president's economic policies and are asking why his explosion of spending and debt has done so little good. Mr. Obama claims that when he took office nobody knew just how deep this recession really was. Not so. I and other economists said it was going to be the worst recession in a generation, and immediately after the 2008 election urged him to temporarily set aside his big-government social-engineering agenda, from energy to health-care reform. Whatever their pros and cons, it was the worst possible time to add such a cost burden and uncertainty to the economy. He was mistaken in the hope the economy could withstand his change.

In 2009, 2010 and 2011, the administration forecast average economic growth of 4% in the next two years. But the economy has not had even one quarter of 4% growth during Mr. Obama's stewardship. Rather, our economy has experienced its longest string of consecutive quarters of economic growth below 4% since World War II. Growth has averaged 1.4% in Mr. Obama's first 13 quarters as president.

His record on jobs is just as bad. Mr. Obama's initial forecast claimed unemployment would never reach 8% if his $800 billion stimulus bill passed in early 2009 (as it did) and would now be below 6%. That's off by 3.9 million unemployed workers, millions more if we include those who have given up looking for work.

Perhaps we should not have expected more from the eloquent apostle of hope and change. Mr. Obama had little experience in or respect for the "for profit" part of the economy. Of his one brief sojourn in the business world, he says in his autobiography he felt "like a spy behind enemy lines."

He now says that Mr. Romney's business career—which former President Clinton describes as "sterling"—is not a qualification to be president. How would he know? Before becoming president, he had no executive experience of any kind—private or public.

Mr. Obama's most recent statements reveal a strange disconnect from basic economic reality. In a press conference on June 8 he said, "The private sector is doing fine," adding that we needed more federal spending subsidizing state and local government jobs, where he claims the jobs problem is centered. But according to the Bureau of Labor Statistics, there are 11 unemployed private-sector workers for every unemployed government worker.

Last month Mr. Obama said, "Since I've been president, federal spending has risen at the lowest pace in nearly 60 years." But it turns out he was quoting a blogger who did not count the massive 2009 stimulus spending. Careful administration fact-checking served former presidents well. Is this administration's standard no longer facts but anything on the Internet?

Mr. Boskin is a professor of economics at Stanford University and a senior fellow at the Hoover Institution. He chaired the Council of Economic Advisers under President George H.W. Bush.

Taxes: this is the same fight that democrats and republicans have been having for decades. Lets look at its fundamental flaw. A business man will expand his business if he sees a demand for his products. You can give that one business man a million dollar tax break, but he wont spend a penny more on increasing his inventory, building factories, or hiring workers unless he sees his product being bought. This is based on simple supply and demand theory, something you learned in “introductory economics.” But the business man wont see an increased demand for his product because the middle class is saving every penny/has no money because of a recession. If however you give thousands of middle class individuals the same $1 million tax break, they will buy the business man’s product, he will expand his inventory, hire employees, the new hires will buy even more goods with their pay checks, and the wheel goes round and round. As you can see, the rich have a choice to spend their tax breaks or not. The middle class MUST spend their tax break just to live a normal life. If I am providing a tax break, I want to give it to the people who I know for a fact will spend it and jump start the economy. The risk that the rich won’t spend their tax break is too high. Let me also add that Bush cut our taxes 12 years ago and I’m still waiting for my utopia.

Obama nixed the keystone pipeline, stating that a proper environmental impact could not be completed in the time frame that the republicans wanted. I am 50/50 on this. One part of me thinks he should have approved it, but the other part of me says that its imperative that the pipeline be safe and secure. A simple earthquake in any one of the 8-10 states the pipeline passes through (it stretches from Canada to Texas) could cause an oil spill that would result in the government and surrounding businesses facing billions of dollars in cleanup costs and losses instead of thousands of jobs. There is something to be said for making sure that it’s built properly.

The Doha Round trade agreement has been in dispute since November 2001.EIGHT public negotiation sessions took place between 2001 and 2008 in addition to an unspeakable number of “behind the scenes” meetings. Yes, Obama could try to kick start these negotiations again, but it’s a bit hypocritical to blame Obama for this failure without first pointing at George W. Bush first. On the note of point fingers, as of July 2011 Obama was responsible for $2.4 trillion of our $14.3 trillion dollar deficit. That came from stimulus spending on the recession, tax cuts forced upon him by the republicans, and lost tax revenue from so many unemployed. George W. Bush cost us $6.1 trillion, $1.4 for Bill Clinton (who left us with a budget surplus), $1.5 for George Bush, $1.9 by Ronald Regan (the Republican god who cut taxes-raised them later-but left us with a deficit), and an additional $1 trillion from presidents before Regan. It’s funny how Republicans preach fiscal responsibility when they are responsible for over half of the deficit.

On Congress: Yes, Obama had a democratic majority in Congress for 2 years, but some democrats didn't agree with some of his policies. These Democrats are called Blue Dog Democrats (google this). They are republicans in democrat clothing. They ran as democrats but have republican ideologies. On paper Obama had a democratic majority in congress, but in reality his majority was fake, he never really had it. Regardless, just because a party has a majority doesn't mean they must vote with one voice (unlike republicans who MUST always "get their a** in line"-John Boehner). A democracy has many voices. All the republicans talk about these days is getting control of every branch of government so they can do whatever they want instead of negotiating with democrats. Is that a democracy?

Professor Boskin would do well to read and digest Smith's Theory of Moral Sentiments. Smith's most famous work presumed a culture whose norms constrained the worst human instincts. Sadly, those norms do not predominate in American capitalism, and it is not clear that they ever did. One might also note that The Wealth of Nations was a rejection of the concentrated economic and political power of the monarchy in his day. How ironic that today it is the titans of American capitalism that concentrate economic and political power in our land. Finally, one should note that service as the head of the CEA under any Bush presidency is hardly a sign of economic expertise - that is, after all, the rarest of commodities known to have even escaped the grasp of Stanford economists.

Paul Baboni commented : "Obama's definition of "hope and change" is now clear, with the impending economic doom getting clearer and closer everyday."

This is very, very scary..... If Obama is reelected, I see the whole shootin' match (economy) collapsing very fast, beginning with a quick collapse in the confidence levels for economic behavior....then economic deterioration following.

Worse yet, Obama and the idiots in the democrat party, in his moronic leftist regime, would not have the faintest hint of a clue about what to do as markets and economies begin collapsing worldwide.

For all you democrats out there, thank you so very much for this decades long march to socialism and disaster. You are all so impossibly stupid it is hard to fathom how you got that way. I try talking with people, democrats, who seem to be intelligent, yet, after long winded discussions, just seem incapable of grasping the Big Picture.

I truly don't understand it. I am just left guessing.

Is there truly no really intelligent humans in the democrat party? I am honesty beginning to think this is the case...that the requirement to be a democrat is having an intellect insufficient to be able to crawl out from under the rock of leftist ideology they seem to hide their brains under. True, they have all been propagandized from birth....but, shouldn't a superior mind be able to overcome this?

After all, there is still the internet......they have not yet purged all information contradicting political correctness.....yet.

There are a number of people on the left who do wake up from the leftist fog, and switch....look at David Mamet........but, the rest of them......just what is their major malfunction? Maybe it is a combination of lack of curiosity (a sign of mediocre intelligence), a lack of an ability to discern connections, patterns (again, a sign of mediocre intelligence), or the desire to absorb and substitute the political correctness, which has always come from the left, for personal observation and logical thinking, in order to gain assured inclusion and approbation from the group think circles which make up the vast bulk of society today (another sign of mediocre intelligence, slothfulness, and needy behavior exhibited to gain acceptance of the group).

The above are just some quick speculations on the 'progressive' mind.

What is so hard about understanding the DEBT BOMB.....unfunded liabilities....the similarities between insurance companies who MUST prepare, who MUST have the money in the bank, to meet the probable payouts of all the policies they have written, and the government, which has made financial promises, similar to insurance companies....payouts which can only be estimated with probabilities.

Insurance executives go to jail if they fail to have the money in the bank. Government bureaucrats and politicians get reappointed or reelected in spite of not having the most rudimentary plans for meeting future obligations.

Sure, by all means, let's turn over the next 25% of the economy into the socialists' hands to mismanage it into more bankruptcy. Why the hell not? It is the fair thing to do, isn't it....government is good....not like those bstrds in the private sector, right?

Obama says.

Gee, I seem to recall something about a Berlin Wall...how we defeated communism......guess not.

McCarthy was right all along, wasn't he?....

..........I am surprised the markets are holding up with the DEBT BOMB here upon us.

Maybe Romney gives us a chance. The best immediate effect from a Romney win is the markets get buoyed by a jolt of confidence that there MAY be light at the at the end of the tunnel.....and that the light is not coming from the runaway locomotive of the ever expanding socialist agenda of the democrats.

Most businesses run business only if they don't have to pay taxes. They don't care how much demand is for their product or how large a profit they have. They just shut down the business if they have to pay taxes. Supply & Demand are just phoney terms. If you elect me, I will abolish all taxes. LOL

2) Businesses are not hiring because of new regulations not because of low demand or fearmongering about new regulations

3) Businesses with sound business plans (i.e. evidence of increasing demand for their products) couldn't get money because institutions and individuals with money had enough confidence in the economy that they would have lent it to them if they had not lent it to the government--at incredibly low rates.

How anyone can defend the President's economic policies is beyond reason. His policies are not based on proven economic behavior that works.. A well functioning economy is based upon individuals providing products or services that others need or desire at prices that lead to mutually beneficial exchanges. Customers receive the goods they need and proprietors receive payment sufficient for them to remain in business with some profit to incent them to continue on with their enterprise. Their profits further enhance the economy when they are invested. People are employed in the process and in turn they spend their earnings to provide for themselves and save for their futures. This is a profit based system. My house, savings and investments will allow me to continue to educate my children and retire someday. I thank all those that have employed me and provided me with the opportunity to improve my families fortune in exchange for my work and effort. The profit motive of private enterprise has been the single biggest reason for improving mankinds existence. History has proven this and history has proven that government motivated economies result in the destruction of mankinds existence (remember the USSR?). The US is experiencing the consequences of an expanding government motivated economy. Continued high unemployment, stagnant wages, and greater demand for social assistance. Public employee unions motivated by personal profit (greed with excessive wages and benefits) and motivated politicians to capture these groups as a voting block are a microcosm of how government motivations impact the whole system. Necessary and reasonable numbers of government employees with reasonable compensation and benefits is a good start to getting the US economy healthy. Reasonable government can free up tax contributions for general health care. Turning over 20% of the US economy (Obamacare) to a political body (government) is a mistake. Allowing for a market based health care system with some reasonable requirements (e.g. portability and preexisting condition coverage) is doable if the political over-reaching ceases. The future of the US economy is at stake in the November election. Our health, greatness, fortune, happiness, future and liberty are at stake. The decision is simple- continued deterioration of the greatest economic system experienced by mankind or the opportunity to improve the greatest economic system with competent leadership that has the experience and the understanding of how profit motivated economies function.

Mr. Boskin et.al, might I suggest you read " Standing On The Sun" by Chris Meyer and July Kirby a provocative and insightful look at the future of capitalism...more informative than some of the nuttiness that mask for insightful commentary...

In Obama's mind, he's brilliant, but, like all liberals, he believes in many ideas and facts, that just plainly, are not true. And like most liberal, he is incapable looking at the FACTS. Reality is meaningless. It's a common thread of liberalism.

And like all liberals, he is the best and smartest human alive. And unfortunately, he's not alone. It's a common

problme.

It's probably due to all those years hanging with the Choom Gang, and the hash, and Maui Woowie, and the Kona Gold, probably did and does have lasting effects. That state of happy brilliance , stays with you always.

I'm really getting tired of reading op-eds where the author purports to be giving Mr. Obama advice as to how to improve the economy, create jobs, or fix health-care. It also annoyed me when I heard Mitt Romney condemning Obama for "Failing to lead!".

Mr. Boskin, do you really want Mr. Obama to take your advice? It sounds like good advice to me...so why on earth would you even offer it up? I want this guy turned out of office in November, and out of the White House by January 21st at the latest. If you want to dispense advice on economic policy, send it to Mitt Romney.

And for Governor Romney: "We don't want Obama to lead, we just want him to leave!" (And you can quote me on that.)

"Mr. Obama constantly reminds us, with justification, that he inherited a recession. But the recession ended over three years ago, while the recovery has been distressingly anemic. He also blames an "obstructionist" Congress. But Democrats had a filibuster-proof majority in the Senate and control of the House his first two years. Republicans couldn't obstruct anything."

Not that I am defending Obama, but Scott Brown assumed office in January 2010, one year after Obama took office, giving Republicans the numbers they needed to mount a filibuster. So Obama had one year, not two, in which Republicans couldn't obstruct anything.

Well-said. A perfectly logical explanation of how Mr. Obama’s economic policies are a prescription for a failed future. Unfortunately, 50% of Americans are below-average in intelligence and this logic is completely lost on them. They are like birds chirping for their next worm and Momma-bird-Barry will be glad to promise them all full bellies. While Adam Smith is correct, Alex de Tocqueville is in-play here.

Perhaps if he had spent a little more time in the library and a little less time in the choom wagon, he would have the qualifications to be president. obama is the ultimate failure of affirmative action.

Health Care and the Stimulus were the two drivers for the first term. After the democrats lost control of the House of Representatives, gridlock took over. The partisan lines were drawn over spending cuts and tax increases. The economy never had a chance.

During one interview during 2008 Obama was confronted with the fact that lower Capital Gains taxes are linked conclusively to higher rates of economic growth. Obama's response; Higher Capital Gains taxes are an issue of "fairness" not growth. This one sentence is the key to Obama's philosophy and that of his Leftist backers. The problem with Leftists's "fairness" standard is that it is a subjective standard. It is a standard of "men, not laws" and is subject to arbitrariness and abuse of power. It is a standard not found in the US Constitution.

I am not one to propose change lightly, but I would be in favor of a constitutional amendment requiring all Federal legislators, judges, and executive branch personnel to read (and pass a simple reading comprehension test) on The Wealth of Nations.

It is a brilliant, insightful, and readable work, one of the gems of Western Civilization.

If Obama had read it, there would be about 12 million more Americans gainfully employed today and he would be coasting to reelection.

The article is nice. However, I do not agree with the conclusion that the President does not care about the profit. He does. It is just not your profit. And he is very good at what he is doing. The Obama family is set for life. Her Majesty seems happy and is finnaly proud of her country and her royal position (even the Queen of England is her peer/pal to tap on a shoulder). The children are doing fine, attending a good PRIVATE school. The family's resources only grow, since the King has no expenses - the court provides everything, including a personal cook and a physician on site. And it feels good to be a king; four more years would be nice.

"USA is just a large piece of a reach fabric that everybody pulls towards him trying to rip off the largest piece possible. Mr. Obama wants only a small piece - enough to make a coat. A king's coat."

Ps.

Mr. Krugman is no longer an economist. He chose to became a philsopher posing as scientist.

What about Adam Smith's discussion of who creates wealth?Wealth comes from manufacturing, mining, drilling, transporters, retailers.No wealth is created by gamblers, stock brokers, pundits, actors, clowns, athletes, government workers, and the service industry. These professions merely redistribute wealth.

So, stimulate the wealth creators and tax the wealth redistributers. Both parties need to understand this part of Smith's "Wealth of Nations"

Four Justices supported the Constitution. Three Justices don't believe in written laws and rules, and one 'old fard' sided with them. This left one Quizling to play the legal role of Bennedict Arnold and deliver individual liberty to the South Side of Chicago. How do I feel: No wonder they carry guns in Chicago! The Supreme Court deficated upon itself and will forever be smeared in the memory of individual freedom.

I must admit to mild surprise that you would publish such a column with a straight face! Obama is disconnected from economic reality? You KNOW that on Jan 20, 2009, Republican elite met and planned ways to sabotage the Obama presidency and the economic recovery and have been doing exactly that for the last 3 1/2 years.

The economic reality is that at a time of crisis, with the country’s entire financial system near collapse, with the economy collapsing, with the stock market collapsing, with unemployment skyrocketing, with people losing their jobs and retirement money, the GOP announced that their NUMBER 1 PRIORITY was to assure that Pres. Obama was a 1 term president---- even BEFORE he was sworn in!!!

They abandoned their duty to the American people for the sake of sabotaging a new president taking office in the midst of the greatest crisis since 1929.--- for the sake of political gain! I don’t know if that fit’s the legal definition of treason, but it sure smells like it and is at the very least, un-American and unpatriotic. Never before have I seen a political party abandon it’s country in time of crisis! NEVER!

Seems to me that Republicans, including you, are disconnected from the notion of patriotism!!! Patriotic Americans do NOT desert their countrry and it's suffering citizens merely to achieve a piolitical goal.

"In 2009, 2010 and 2011, the administration forecast average economic growth of 4% in the next two years. But the economy has not had even one quarter of 4% growth during Mr. Obama's stewardship. Rather, our economy has experienced its longest string of consecutive quarters of economic growth below 4% since World War II. Growth has averaged 1.4% in Mr. Obama's first 13 quarters as president."

President Obama, his administration, and democrats in the House and Senate led by Pelosi and Reid have been assaulting the private sector for almost six years. It started in 2006 when the democrats took the House and Senate, but of course soared as Obama took office.

This President trashed over 200 years of property rights law when he used arbitrary power to transfer ownership of Chrysler and GM to his union buddies, while taking ownership of AIG. Has anyone heard any plans from this administration to restore any of these companies to the private sector?

He attempted to use TARP to take over the Banking and Financial Services industry, but when that didn't work he once again resorted to arbitrary power through regulation. And thus Dodd-Frank was born.

He attempted to take control of the energy industry using the so-called Cap and Trade legislation, but when that didn't work he once again resorted to arbitrary power vis-a-vis his EPA.

And let's not forget the assault on Boening and other companies in the industrial base that he could not control through the passage of Card Check. So he has once again resorted to regulation through the NLRB.

How many so-called czars has this President established?!

Of course, he did succeed in taking control of healthcare, with help from SCOTUS...

So is there still any doubt that this president is led by a marxist ideology? He has attacked free market principles at every step and opportunity. His speeches are littered with marxist ideology, all you have to do is listen. When he said he was going to transform America, what exactly did people think he meant? What did they think he was going to transform America to? Or did everyone think it was just a slick campaign slogan? No, Mr. Obama meant what he said, and he is succeeding.

I pray Americans wake up to the threat we are all now facing. Our freedoms and liberty are under assault. People that think the ACA was about healthcare are diluting themselves. We are falling off the precipice to the tyranny of a socialist state. If we don't stop this president in November, soon we will all become slaves to the central authority known as Washington D.C. We will all be answering to government bureaucrats and we will no longer have a government by the people for the people. Limited government and the rule of law will become things of the past.

He, President Obama, represents a minority of 9% of our republic who unfortunately are in place as controllers of our economic/political machines, educational institutions, and 95% of our media, including all of NPR and Public TV. Add another 20% max who follow and gain from these people, and you have constituted the core of the new Roman mob. Forget about us, we are toast. God help the world, because, like Rome before us, we cannot afford our position without extracting the wealth of Terra Firma. Therefore we must consume it, and consume it we will!

Mr. Boskin continues his efforts to be the Paul Krugman of the Right. Unforunately he is not as good an economist as Mr. Krugman (who won the John Bates Clark Medal and the Nobel Prize) nor as good a polemicist as Mr. Krugman. Recommending that he should read Adam Smith? Is that the best you can do? Yawn.

'Last month Mr. Obama said, "Since I've been president, federal spending has risen at the lowest pace in nearly 60 years." But it turns out he was quoting a blogger who did not count the massive 2009 stimulus spending. Careful administration fact-checking served former presidents well. Is this administration's standard no longer facts but anything on the Internet?'

So now the Administration checks the blogs for their policy? No, but Boskin plays well to the crowd. Obama was referring to budgets submitted under his term, the 2009 stimulus spending was done in the first month he was in office. Yes, a technicality, and one the serves every politician and President well. Though Boskin would have us believe careful fact checking served Presidents well --- guess he forgets Bush's tax cuts, Part D, IRAQ WMD, an so on. When your objective is ideology, no matter right or left, "facts" are manipulated to meet the policy objective.

Terrific article. This economist is willing to step up to the plate and express his views which stem from his academic training. What we need are other influential economists to do the same especially those who vote Democrat. It is amazing how money will purchase a man's integrity. The philosophies of the Democratic Party do not contribute to the general welfare of the State even though they sound good to the ear. Sound investments are made by those who suffer the risk of failure.

"At times Mr. Obama suggested that the profit motive is somehow ignoble, ... But ... the pursuit of profits is essential to a successful economy, allocating resources to the use consumers value most.

This is, of course, anathema to the Great All-Knowing Central Planner who knows better than the market what consumers value most. And if consumers disagree then they are clearly flawed in their thinking and will simply have to re-align their values with those of the Great, All-Knowing One.

These type of articles should be on CNN or USA Today. You are preaching to the choir here. Ask the average american who Adam Smith is your response will be either a vacant stare or some obscure sports person reference.

As a person who was part of a business plan that did not happen here is the real reason.

A group got together to explore a wireless internet business. It went so far as locating antenna locations and looking at potential customers. Then there was a speech where President Obama said the government should bring broadband to everyone. No one in our group had the political contacts to get a grant, and none of us had the guts to compete with the government.

Now I imagine that this same thing is happenning in fields like healthcare and green energy where the government wants to take control.

I hear that many companies are sitting on piles of money which indicates they are also afraid to invest.

Until businesses know that the government is there to provide basic services (Fire, Police, roads) and not be in competition or control the economy will suffer.

There is no way Obama can be smarter than me. If you elect me, I will solve all of the worlds problems the first day I am in office. If I can't do it, I will relinquish all power to Thomas Sofos who will definitely solve all your problems. Seriously.

It is perhaps worth noting that he won the Nobel for his work supporting free trade, and that when he publishes academic articles, they are far more conservative that his NYT tirades (probably has something to do with peer review).

You are right! Two years ago, when a WSJ editorial referred to American authors who influenced our nation, many responders thought Adam smith was an American author.

Adam Smith’s “butcher, brewer, baker” (small businesses) comment is often quoted, also the “invisible hand,” a reference used once in Wealth of Nations. But, Smith also disparaged oligarchs and monopolists, including their lobbyists, often produced by the “self interest” in the quote. He believed in taxes to pay for required government services including regulation, even suggesting taxing the American colonies for the cost of defense and other services by the British. “Wealth of Nations” and “The Theory of Moral Sentiments,” his other major book, should both be read by anyone interested, to avoid careless construal of his thinking. Only he knew his thinking, which is deeper than Boskin’s quote.

In fact there are many Adam Smith-reading and free trade-supporting economists who feel, as Krugman argues in his books and columns, that Obama's worst economic error was not stimulating the economy enough, and not resisting more strongly against calls to slash the budget deficit in the midst of a major economic slowdown.

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